ChannelNet

Something the Auto Industry Got Right

It is true that the Big 3 are in a state of disarray, in a word…a mess.  However, they are doing something right, using the Web to help customers buy a new vehicle. From dealer locators to finance options online, the Big 3 are the leaders in transitioning customers from online to in-dealership to complete their new vehicle purchase.

 

Here is how it works… I get online and investigate what vehicle I want to purchase and all my options.  Once I figure it out I can look at the inventory on each local dealer’s lot to determine if my vehicle is in stock.  Once I determine what dealers meet my needs I can arrange a test drive, get a quote on my exact vehicle or initiate the purchase.  I still show up at the dealership to take delivery, but it is nothing like it use to be.

 

I can do all this 24x7 in the comfort of my home or office.  Good dealers that “get it“ respond instantaneously because they understand the world has changed and they have adapted.  Others that are not as savvy still try to get you to stop by.  If you are a Web savvy customer what use to be a very painful process is now hassle free because of the Web,.  No more driving from dealer to dealer, sitting for hours in the showroom while the salesman runs back and forth to the sales manager’s office.  If you know how to use this new sales process, which 89% of new vehicle shoppers do according to J.D. Powers, can be done between the Web and email and all you have to do is show up to take delivery and sign the papers, limiting your time in the showroom to 30 minutes.

 

When it comes to big ticket purchases, like a new vehicle or home improvements, the key to success online is understanding how to help customers use the Internet as a gateway to a sales and service partner that can meet their needs.

Outside In versus Inside Out

I have been working with large corporations for the last 25 years evangelizing and implementing new technologies to streamline sales and service for their customers.  After all these years I am still constantly dumfounded by how large corporations still try to dictate sales and service processes from the “Inside Out”. It all seems so simple to me… all they need to do is get out and spend time with the field sales and service organization and customers.  It is not a big deal, nor does it take a lot of money or time, but is does take a willingness to stop dictating policy and start listening.

In my experience it is the warriors on the front lines that are driving the business and are the most in-tune with what is really going on.  But instead of spending time in the field (which can be painful) the corporate policy makers are back at HQ running around, sitting in meeting after meeting, trying to figure out what needs to be done.  What they miss in all the busy work is what selling and servicing customers really takes.   Instead of listening and assisting the field the corporate policy makers worry about procedures and reports and don’t seem to have a clue on how to drive more revenue.   

So, if I were to say one thing to the senior sales and marketing management at large corporations it is to stop the insanity and deploy those jobs into the field. Stop trying to dictate results and start making them happen at the point of sale, where the customer lives.

Being a Pioneer Requires Unstoppable Perseverance.

I read with delight a story that recently appeared in Internet Retailer. You might ask, why on earth would a story in Internet Retailer be such a thrill? After eight years of evangelizing the virtues of multichannel customer interaction to the retail industry, it sounds like they actually might be coming around. When the Internet was first evolving, most large retailers established their initial Web sites as separate and distinct divisions, groups, etc. For example, if they had a catalog operation, the Web site became an extension of that group--separate and apart from the big money maker, the "brick and mortar" store operation. This approach essentially put corporate online divisions and retail stores in competition for customers. What did not seem to register with either group was that the online customer is the same customer that shops in store. While a customer might shop online for a small commodity item because it is convenient to use the Web, the big ticket purchases still primarily happen in store. Customers want to use the Web to do the research, but buy in store to see, touch, and try out the big ticket products. Therefore, the opportunity to leverage the combined power of the online and in store channels for loyal customers is tremendous. But the fact remains that if the online team views the brick and mortar stores as competitors for the same customer, there is no incentive for the two groups to work together. In the end, customers want to select their purchase channel based upon their own criteria, and not be driven to a particular channel because of the way the corporations are organized internally. After all, retailers spend billions of dollars annually on advertising and promotion with one goal in mind: to drive customers into their stores. Why? Because they know that once the customer walks through the front door, the average transaction value per customer store visit is higher than online by a factor of two. So in the end, it is in the best interest of senior management to better leverage the traffic that comes to their Web site, and to provide a smoother transition from online to in store. To read the Internet Retailer article, Where does the web team belong?, click here.

Personalized Web Sites are finally a reality.

Back in the days of the .COM boom, everyone predicted that the Web would enable a totally personalized experience for every customer that used a Web site.  About the closest true personalization has come since the Gold Rush is the “if you like this book or movie, then you might like this one,” functionality on sites like Netflix and Amazon.com.  However, as of today with the inclusion of VW and Audi to ChannelNet’s growing customer base over 1.5 million Personalized Microsites will be deployed to automotive owners by the end of ’07.  Now, you might ask, what has driven this rapid acceptance of what seems like a very basic idea that was promised 12 years ago.  The bottom line is that enlightened senior business executives finally realize the Web is the front door to their entire sales and marketing organization, especially brick and mortar sales channels.  Unfortunately getting anything done via their IT or .COM departments has become mission impossible.  Business executives today are faced with fast paced business changes and opportunities.  They simply can’t wait any longer.  I talked to one client recently that told me the .COM team was tied up with priority projects until 2009.  How on earth does anyone get anything done, let alone personalized Web sites that are personalized and relevant to customers?  That is where ChannelNet comes in.  We have the proven technology, business smarts and creativity to deliver reasonably priced personalized Web sites on a fast turn around that businesses crave.  This new kind of solution is referred to in the software industry as Software as a Service (SaaS).  Having been around for such a long time we simply call it a turnkey end-to-end solution that is focused on driving top line growth, no matter what the industry, through more personalized relevant and actionable communications.

Europe Poised to Lead

On a recent sweep through Europe to meet with a broad array of customers, I was stunned by the overall vibrancy of each market visited.  Up to now, Europe had been a few steps behind the U.S. in eCommerce enablement.  Just figuring out their brand Web site or .COM strategy was a struggle.  But this time it was different.  The clients we met with were downright hungry for advanced Web sites to drive sales and improve customer experience.  European companies seemed to have worked their way through the local agency driven brand Web site phase and are now poised to embark upon the next stage of the Internet’s evolution.

Having made two stabs at European expansion before, retreating both times, I am naturally hesitant but extremely encouraged.   Of course, in retrospect, maybe I should have not been so surprised.  European marketing differs in one major area; their focus has always been on what they call “below the line marketing” that drives sales.  In the States, the focus has always been on “above the line” traditional marketing and brand activities primarily based on mass advertising.

So, the European economy and EU are literally firing on all cylinders. With the more advanced countries in Europe well positioned to leapfrog the States, at least in how they intend to leverage the Internet with their customers and sales channels.

J.C. Penney Does the Multichannel Mantra

As the Internet moves to the core of J.C. Penny’s retailing strategy, chairman/CEO Mike Ullman, declared at last month’s Shop.org’s FirstLook conference that the future of his company’s success is all about multichannel sales. Afterall, this is the man that helped lead the firm’s operating profit from 7 percent in 2005 to 9.5 percent last year. Overtaking catalog sales for the first time in its history, the Internet is a core channel for J.C. Penney. According to Ullman, however, that doesn’t deem the catalog irrelevant. Build it and they will come…in another words, they don’t care which way the customers come in as long as they come in. And that means building sophistification among channels that provides customers a seamless experience from the web to the sales associate. Hmm, it looks like employees are buying into this strategy too as a recent survey indicates 73 percent of J.C. Penny’s workforce thinks it’s a great place to work.

Hometown Movie Premiere

I attended my very first movie premier on December 12.  Warner Brothers flew several plane loads of stars and their entourage to Huntington W. Va. to participate with the town in the celebration of the movie.  The movie Director MGee, Matthew McConaughey, Matthew Fox and others joined in the premier activities.  Next to the actual plane crash 35 years ago this is the second biggest event to happen in my home town during my life time.  We attended a pre party, the movie and finally the post premier party.  We had a great time and really enjoyed the movie.  I hope all of you will go see it.  It is hard for me to be impartial given I lived through the trauma of the actual event, was a freshman in college at Marshall and was a townie too boot.  Judge for yourselves, go see the movie "We Are Marshall!"

"We are Marshall"

Three times a year, as a member of the Marshall University Foundation Board I attend meetings.  Not only do I feel really good about making a contribution to my home town and university, but I have met many accomplished leaders that also share my love for Marshall and Huntington W. Va.  For most of 2006 the only thing everyone can talk about is the “We Are Marshall” movie coming out December 22.  Advertisements are already running on ESPN, Warner Brothers is gearing up for the big premier of the movie on December 12 in Huntington and all reports so far are that the movie is going to be a hit.  I can’t think of any part of the country that could use the boost more than W. Va. and specifically Huntington.  I have watched the population decline as factory jobs packed up and went off shore.  Marshall has always been important to the community, but as the job landscape has changed it is now the critical driver in the local economy.   Marshall has always been a step child to the larger, richer and more powerful West Virginia University.  My bet is that all that will change now that the movie industry has decided to put Marshall and Huntington W. Va. on the map.  Nothing could keep me away from the movie premiere.

Should a manufacturer profit from selling leads to their sales channel?

There is a war raging in the automotive industry over sales leads.  The question automotive executives must ask themselves is should we profit from sales leads we pass on to our sales channel?  In the past the question has been answered easily.  Manufacturers would conduct advertising, direct mail campaigns, and other marketing techniques to drive customers to the point of sale where the transaction takes place.  If sales leads were generated from these activities they were passed on for free or a nominal charge to the sales channel.  Then along came the Web.  As consumers and businesses flocked to the Web to conduct research on their next vehicle purchase, auto manufacturers have cooked up schemes to change the business model and organize entire companies, divisions and groups within their corporate structure to profit from passing sales leads onto their channel.  While I can understand the need to provide these services at cost, I don’t understand the profit motive in this.  Aren’t manufacturers and their sales channels in the selling game together?  Shouldn’t manufacturers concentrate their funding and energies on making their products more desirable and marketable vs. building up departments and groups to profit from lead generation?  Should profits coming from the Web be used in more effective ways to drive more sales vs. going into the corporate chauffeurs?  It’s high time for the auto industry to wake up and stop trying to profit from marketing services they provide to dealers and start helping them do everything they can to sell more products -- more effectively.

Changing the world one car dealership at a time.

Much of our work has been based in Detroit with companies like Ford and GM. Detroit has had a profound impact on the world. Innovative ideas—from the assembly line to the Motown sound--fostered unparalled growth for Detroit for decades. And while we’ve all seen the automotive industry shift from the Big 3 to foreign manufacturers it isn’t all doom and gloom. There are many examples of vision and innovation that we can all still learn much from.

I’d like to share a story about a part of the automotive industry that is near and dear to my heart. Car Dealers. My company powers thousands and thousands of dealer websites across the globe. Car dealers seem like the archetypal small businessmen and it's hard to believe that they could influence the decisions of large, global corporations. But, collectively, they did. And, they continue to wield tremendous influence in this industry.

Back when the automotive industry first started, the big Automobile companies could have owned the dealerships themselves but instead, they preferred to setup franchises or dealerships, and work with them as "partners". When hard times hit---the Great Depression for example—some automobile companies relied on their dealers to help get them thru the hard times. They forced dealers around the country to buy new cars that had little chance of selling to keep factories afloat. The dealers knew that if they said no they'd never see a Model T again, so they were forced to "absorb" the inventory. In response, dealers banded together—one dealership at a time—and with a unified voice they set out to institute radical change in their industry. As a result, the first franchise law was passed in 1937. And the rest is history. You see, dealers recognized that their inequalities were collective, not individual. And, while the voice of one was important the power of many was insurmountable.